consolidated construction consortium ltd share price Directors report

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MANAGEMENT DISCUSSION AND ANALYSIS REPORT

To

The Members

Presentation on the 26th Annual Report highlighting the business and operations of the Company on a standalone basis and the audited financial statements for the financial year ended 31st March, 2023.

Consolidated Construction Consortium Limited was under Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) in terms of Order passed by the Honble National Company Law Tribunal (NCLT), Chennai Bench with effect from 20th April, 2021. Mr.Krishnasamy Vasudevan (IP Registration No. IBBI/IPA- 001/IP-P00155/2017-18/10324) was appointed as Interim Resolution Professional by NCLT vide its Order dated 20th April, 2021 who has been subsequently appointed as the Resolution Professional (RP) by the Committee of Creditors. The Companys affairs, business and assets were managed by the RP since u/s.17 IBC the powers of the Board have been suspended and vested with RP till May 12, 2023

Hon. NCLT Chennai Bench, vide its order IA/627/CHE/2023 in IBA/483/2020 dt: 12th May 2023 had passed order under Section 33(1) of IBC 2016, for liquidation of the Company and appointed Mr. Radhakrishnan Dharmarajan with Regn. No IBBI/IPA-001/IPP00108/2017-18/10215. However, the Promoters of the Company had appealed to Hon. NCLAT Chennai Bench, and obtained interim relief from publication of the liquidation by the liquidator vide Company Appeal AT (CH) (INS) No: 139/2023 dt: 17th May 2023. The Companys affairs, business and assets are being managed by the Liquidator Mr. Radhakrishnan Dharmarajan, from May 12, 2023, since u/s.34(2) of IBC, 2016 the powers of the Board have been ceased and vested with Liquidator.

1. FINANCIAL RESULTS (in crores) The Financial Results of the Company for the year under review is summarized below for your perusal and consideration.

The Financial Results of the Company for the year under review is summarized below for your perusal and consideration.
Particulars	2022-23	2021-22
NET REVENUE	134.32	125.29
PROFIT BEFORE TAX AND DEPRECIATION	(112.65)	(129.63)
PROFIT /(LOSS) BEFORE TAX (PBT)	(115.75)	(132.88)
PROVISION FOR CURRENT TAX	-	-
TAX EXPENSE – DEFERRED TAX	(0.66)	(0.76)
PROFIT AFTER TAXES/(LOSS) (PAT)	(115.08)	(132.12)

1.1 Financial Performance

The Company has achieved Net sales of Rs.134.32Crores for the year ended 31st March, 2023 as compared to Rs.125.29 Crores in the previous year.

The Company was able to reduce the loss during the year under review, from Rs. 132.88 Crs during the previous year to Rs. 115.75 Crs.

2. DIVIDEND

Your Liquidator / RP have not recommended any dividend for the financial year 2022-23 in view of the losses incurred and the need to conserve resources of the Company.

3. Transfer to Reserves

Luquidator / RP have not recommended any amount to be transferred to reserves for the financial year 2022-23 in view of the losses incurred during the year

4. CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP):

Mr. Krishnasamy Vasudevan (IP Registration No. IBBI/IPA-001/IP-P00155/2017-18/10324) has been appointed as IRP/RP by NCLT, Chennai Bench under Section 13(1) (c) of the Insolvency and Bankruptcy Code, 2016.

Hon. NCLT Chennai Bench, vide its order IA/627/CHE/2023 in IBA/483/2020 dt: 12th May 2023 had passed order under Section 33(1) of IBC 2016, for liquidation of the Company and appointed Mr. Radhakrishnan Dharmarajan with Regn. No IBBI/IPA-001/IPP00108/2017-18/10215. However, the Promoters of the Company had appealed to Hon. NCLAT Chennai Bench, and obtained interim relief from publication of the liquidation by the liquidator vide Company Appeal AT (CH) (INS) No: 139/2023 dt: 17th May 2023.

5. MATERIAL EVENTS OCCURRING AFTER BALANCE SHEET

There are no material events occurring after the closure of financial year, except as provided above.

6. MANAGEMENT DISCUSSION AND ANALYSIS Introduction

Indian economy is driven through multiple economic sectors and infrastructure is one of the major sector contributions to continuous growth. The infrastructure sector in India is poised to grow at a CAGR of 8.2% by 2027. The launch of a quadrilateral economic forum by India, the US, Israel & the UAE in November 2021 has further added to the influx of infrastructure growth perspectives.

In order to meet Indias aim of reaching a US$ 5 trillion economy by 2025, infrastructure development is the need of the hour. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as ‘Make in India and the production-linked incentives (PLI) scheme to augment the growth of the infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward funding for transportation, electricity, and water& irrigation.

In India, about 42% of the projects in the NIP are under implementation, which means construction work is already going on. Another 19% is under the development stage, while a significant 31% is still in the conceptual stage. During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.

FDI in Infrastructure in India

Foreign Direct Investment (FDI) in the construction development (townships, housing, built-up infrastructure, and construction development projects) and construction (infrastructure) activity sectors stood at US$ 26.17 billion and US$ 26.30 billion, respectively, from April 2000 – Dec 2021, according to the Department for Promotion of Industry and Internal Trade (DPIIT). Infrastructure-related operations made about 13% of the US$ 81.72 billion total FDI inflows in the financial year (FY) 2021. Indias infrastructure is anticipated to expand at a compound annual growth rate (CAGR) of almost 7% during the forecast period (2019-2028).

Highway construction would be done, with 2,500 km of access control highways, 9,000 km of economic corridors, 2,000 km of coastline and land port roads, and 2,000 km of strategic highways.

The FASTag system promotes greater highway commercialization, allowing the National Highways Authority of India (NHAI) to raise more funds. Before 2024, it was projected to monetize at least 12 lots of roadway bundles totalling more than 6,000 km. The government has set aside US$ 236 billion (Rs. 1,963,943 crores) in the budget for road infrastructure.

The government-sponsored National Investment and Infrastructure Fund (NIIF) received a funding commitment of US$ 100 million from the multilateral Asian Development Bank (ADB) in 2020. Between the financial years (FY) 2000 and (FY) 2019, inflows in the verticals of townships, construction development projects, and housing were estimated at US$ 25.5 billion. The "Smart Cities Mission" and "Housing for All" programmes have benefited from these initiatives. Saudi Arabia seeks to spend up to US$ 100 billion in India in energy, petrochemicals, refinery, infrastructure, agriculture, minerals, and mining.

Infrastructure Growth Highlights

Surety Bond Insurance

The road, transport, and highways ministry launched the countrys first-ever surety bond insurance product, a move that would reduce the dependence of infra developers on bank guarantees.

Surety Bond Insurance acts as a security arrangement for infrastructure projects and insulates the contractor as well as the principal. The product caters to the requirements of a diversified group of contractors, many of whom are operating in todays increasingly volatile environment. The Surety Bond Insurance is a risk transfer tool for the principal and shields the principal from the losses that may arise in case the contractor fails to perform their contractual obligation.

Research Development

According to the Ministry of Road Transport & Highways, National Institute of Technology, Silchar, (NIT Silchar) and National Highways Infrastructure Development Corporation Limited (NHIDCL), have signed an MoU to boost cooperation in the field of highway engineering and other infrastructure works.

"National Highways & Infrastructure Development Corporation Ltd (NHIDCL), a CPSE under the Ministry of Road Transport & Highways has signed MoU with NIT, Silchar on 26th October 2022 for seeking and promoting innovative technologies to find pragmatic solutions to the challenges posed in the construction of highways facing extreme climatic conditions".

Road & Transport System

National highways account for 2% of the total road network and carry over 40% of total traffic. Highway construction in India increased at 17.00% CAGR between FY16-FY21. Despite the pandemic and lockdown, India has constructed 13,298 km of highways in FY21. In FY21, 13,298 km of the highway was constructed across India.

The market for roads and highways is projected to exhibit a CAGR of 36.16% during 2016-2025. Almost 40% (824) of the 1,824 PPP projects awarded in India until December 2019 were related to roads.

The highways sector in India has been at the forefront of performance and innovation. The government has successfully rolled out over 60 projects worth over US$ 10 billion based on the Hybrid Annuity Model (HAM). HAM has balanced risk appropriately between private and public partners and boosted PPP activity in the sector.

Road to Future

The roadmap to Indias infrastructure is exciting and the new decade seems to be promising. More and more green and clean initiatives are happening across government bodies in major countries, especially, the Indian government has given the much-needed push to the infrastructure sector in the recent 2021 budget. India is looking at a US$ 5 trillion economy dream.

As per the Department for Promotion of Industry and Internal Trade (DPIIT), FDIs in the construction development and construction sector stood at US$ 26.17 billion and US$ 26.30 billion, respectively, between the period of April 2000 and December 2021. The logistics sector in India is rising at a CAGR of 10.5% annually which shows that both in terms of investments and revenue the infra game is going strong.

India is now at a juncture where a huge investment in R&D for energy-efficient and green fuel is much-needed. Thus, boosting the overall infrastructure

Financial Performance:

The financial performance of the Company for the year 2022-23 is described in the Directors Report under the head Financial Result.

Outlook:

The recent passage of the IBC (Insolvency & Bankruptcy Code) has been a major change in the environment for the company.

Cautionary Note:

The statements forming part of this Report may contain certain forward-looking remarks within the meaning of applicable laws and regulations. The actual results, performances or achievements of the Company depend on many factors which may cause material deviation from any future results, performances or achievements.

Significant factors which could make a difference to the Companys operations include domestic and international economic conditions, changes in Government regulations, tax regime and other statutes.

The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.

UNLOCKING INVESTMENTS IN SUBSIDIARIES

Particulars of Loans and Advances in the nature of loans as required under Listing Regulations.

(Rs. In Lacs)

	Balance as on		Maximum outstanding
Sl.No. Name of the Company	31.03.2022	31.03.2023	31.03.2022	31.03.2023
A. Subsidiaries
Consolidated Interiors Limited	897.91	897.91	897.91	897.91
Noble Consolidated Glazings Limited	3465.61	3465.61	3465.61	3465.61
CCCL Infrastructure Limited	1373.01	1373.30	1373.01	1373.30
CCCL Power Infrastructure Limited	602.40	602.40	602.40	602.40
CCCL Pearl City Food Port SEZ Limited	388.44	395.05	395.05	395.05
Delhi South Extension Car Park Limited	(212.35)	(212.35)	(212.53)	(212.53)

CCCL has made total investments of Rs 35.89 Crores in its subsidiaries viz. CCCL Infrastructures Limited (Rs.22.91 Crores), Consolidated Interiors Limited (Rs.6.78 Crores), Noble Consolidated Glazings Limited (Rs.1.65 Crores), CCCL Power Infrastructure Limited (Rs.0.05 Crores) and Delhi South Extension Car Park Limited (Rs. 4.5 Crores). These investments are yet to yield returns. While the investment decision is sound, the execution of these businesses have faced various bottlenecks in the form of non- availability of working capital, un-favorable market conditions, other macroeconomic issues.

These have stressed the cash flows of the parent company, CCCL presently; we are in advanced discussions with various investors. Going forward, it is proposed to unlock their value by divesting majority equity stake in these companies.

6. SUBSIDIARIES

In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular.

(a) Consolidated Interiors Ltd:

The focus has been to complete the jobs on hand and wait for the right opportunities till the market stabilizes. Due to sluggishness in the environment there is not much headway with the progress.

(b) Noble Consolidated Glazings Ltd. (NCGL)

The glazing market being a sub set of the construction industry, the various factors discussed above drastically affected the operations of NCGL. Completion of projects on hand and collection of receivables and optimization of costs had been the priority since 2015-16. With the much awaited economic stability expected in 2023-24 and the resultant market improvement better days are foreseen. The Company has streamlined its operations and expected to perform better in the near future

(c) CCCL Infrastructure Ltd.

The Company shall disinvest CCCL Infrastructure Ltd

(c)(i) CCCL Pearl city Food port SEZ Ltd.

As this is a subsidiary of CCCL Infrastructure Ltd, this Company also shall be disinvested.

(d) Delhi South Extension Car Park Ltd.

The Concession fee paid to Delhi Municipal Corporation has been refunded in view of project cancellation.The company has certain claims against Delhi Municipal Corporation for the cancellation. The same is under consideration by Delhi Municipal Corporation.

(e) CCCL Power Infrastructure Limited

Though the Power sector has seen a fall in the recent years, the Company has strived to perform to its full potential, but due to various factors the Company struggled to perform to the mark. However, electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required. The Government of Indias focus on attaining ‘POWER FOR ALL has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides

The Company is eyeing a positive trend in future and is optimistic of a revival to this sector.

The Company has streamlined its operations and expected to perform better in the near future.

A Statement Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in Form AOC-1 is annexed to this report as "Annexure A".

7. OPPORTUNITIES

In India, the infrastructure sector is instrumental in creating wide sources of employment. Many ancillary industries are dependent on the Infrastructure development industry. Infrastructure growth is necessary for the growth of the overall economy. Both are inter-dependent. Considering the importance of sector, government policies and budgets are accordingly drafted to promote infrastructure development.

The Company has more than 25 years of rich experience in the EPC Sector and was one of the major players in theindustry. It had successfully completed national as well as international projects with quality. The Company had in itslist of clients, major public and private sector organizations.

Presently, its affairs, business and assets are being managed by the Mr. Radhakrishnan Dharmarajan, Liquidator. In view of the above, the ensuing Annual General Meeting is being convened by the Liquidator.

8. THREAT PERCEPTION

Challenges:

• Despite the prospects, the sector continues to face challenges from land acquisition issues, adverse political and structural changes, shortage of talent, design and construct ability issues, and rising material and labor costs. However, the land acquisition and environment related issues are being addressed on war footing basis to ease the constraints.

• Policy bottlenecks, slow clearance of projects and rising inflation have dampened private sector sentiments and have stifled investments in Capital expenditure. A high level committee has been constituted for speedy clearance of stalled projects and monitoring the implementation.

• Working capital cycle has been elongated mainly due to stretched receivables, which has affected the cash flow position of the companies in the sector. Many of the companies have been forced to draw their full limits with the Banking system or restructure the facilities.

• Your Company is expecting a positive comeback from CIRP process, subject to the outcome of the decision of Hon. NCLT, Chennai Bench.

• Lengthy dispute resolution mechanism in the sector is yet another major factor affecting the cash flows of the construction companies

• This coupled with rising interest rates have led to a drop in the PAT margin and deterioration of debt coverage ratios of construction companies.

• Shortage of labour also has become a threat as the industry depends majorly on labour for its sustainability.

9. RISK PERCEPTION

Needless to mention, with huge money, there comes the involvement of big risks. Construction is a high-risk business. Mitigation of risks is the all en-compassing requirement. Broadly speaking, construction projects face the following type of risks:-

• Business Risk	• Market Risk
• Financial Risk	• Legal Risk
• Commodity Risk	• Political Risk
• Exchange Rate Risk.

10. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Internal Control system had been evaluated by the by the Auditor & erstwhile Management before CIRP commenced. Scope of work of Auditors covers review of controls on accounting, statutory and other compliances and operational areas in addition to reviews relating to efficiency and economy in operations.

11. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the consolidated financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities and share based payments which are measured at fair values as explained in relevant accounting policies. Fair valuations related to financial assets and financial liabilities are categorized into level 1, level 2 and level 3 based on the degree to which the inputs to the fair value measurements are observable.

The Consolidated Balance sheet, Consolidated Statement of Profit and Loss, Consolidated Statement of Changes in Equity and disclosure requirements with respect to items in the Consolidated Balance Sheet and Consolidated Statement of Profit and Loss are prepared in the format prescribed in Division II–Schedule III to the Companies Act, 2013 and are adequately presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards and the Listing Agreement. The Consolidated Cash Flow Statement has been prepared and presented as per the requirements of Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows".

12. HUMAN RESOURCES

It has been the tradition of the Company to maintain excellent industrial relations at all levels inspite of the hurdles faced by the Company in the recent times.

13. CORPORATE GOVERNANCE

A separate report on the Corporate Governance also forms part of the Annual Report. With regard to the Business Responsibility Report, the Company is not covered in the top 500 listed entities, based on the market capitalization at BSE & NSE as on March 31, 2023. Hence there is no requirement for the Company to comply with Regulation 34 of SEBI (LODR) Regulations, 2015.

14. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The provisions as specified under Companies Act, 2013 shall not be applicable during the Insolvency Resolution Process in respect of a listed entity which is undergoing corporate insolvency resolution process under the Insolvency Code.

Hence, the Committee got dissolved on 20th April, 2021 when NCLT Passed order for initiation of CIRP as the power of the board was ceased on appointment of Liquidator / RP.

15. SEXUAL HARASSMENT POLICY

The Company had adopted the prevention of sexual harassment policy and subsequently also formed a committee for the same. Complaints Received - Nil Complaints Disposed off - Nil

16. DEPOSITORY SYSTEM / E-VOTING MECHANISM:

The Company has entered into a Tripartite Agreement with both the Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (I) Ltd (CSDL) along with Registrars M/s. KFin Technologies Private. Ltd, for providing electronic connectivity for dematerialization on the Companys shares, facilitating the investors to hold the shares in electronic form and trade in those shares. The shares of your Company are being traded now on the Bombay Stock Exchange and National Stock Exchange under compulsory demat form. Further, in accordance with provisions stipulated under Companies Act, 2013, the facility of e-voting is also made available to all shareholders of the Company. The instructions regarding e-voting is enclosed along with this report. All shareholders are also requested to update their email ids with the Company or our RTA M/s. KFin Technologies Private. Ltd.

17. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Sections 124 and 125 of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund. The details of the same are covered under the Corporate Governance Report.

18. AUDITORS

STATUTORY AUDITORS

The Auditor M/s ASA& Associates, LLP, Chartered Accountants, (FR No. 009517N/ N500006), Chennai were appointed as the Statutory Auditor of the Company at the 25th Annual General Meeting held on 27.12.2022 to hold office for a period of five years from the conclusion of 25th AGM till the conclusion of 30thAGM of the Company.

AUDITORS REPORT AND MANAGEMENTS RESPONSE TO AUDITORS OBSERVATIONS

a We draw attention to Note No. 5 to the standalone financial results, stating that the financial results have been prepared on a going concern basis in spite of the material uncertainties regarding going concern. We were informed by the RP that pursuant to the Corporate Insolvency Resolution Process (CIRP) which is currently in progress, as per the Code, it is required that the Company be managed as a going concern during the CIRP and accordingly, the standalone financial results are continued to be prepared on going concern basis for the reasons stated in the said note. In view of the negative net worth, drastic reduction in revenue, increasing negative cash flows and in the absence of an approved Resolution Plan, petition for liquidation filed by RP, the preparation of the financial results on a fundamental accounting assumption of going concern, in our opinion, is not appropriate. The effect of such change in classification in the financial state of affairs as presented in the financial results is not ascertainable, since we have not been provided with the valuation of the entity on liquidation basis obtained by the Resolution Professional.

b We have not been provided with access to the records and information including the minutes of the meetings of the Committee of Creditors (COC), valuation reports, outcome of certain procedures carried out as part of the CIRP etc. We were informed by the RP that the aforesaid information are confidential in nature and the same could not be shared with anyone other than the COC and the Honble NCLT. In view of the above, we are unable to comment on the possible impact, if any, on the financial results, presentations and disclosures, that may have arisen had we been provided with those information.

c As stated in Note No. 14, the company has not physically verified its Property, Plant and Equipment ("PPE") during the year. With regard to the Capital Work-in-Progress (CWIP) amounting to Rs.2,258.12 lakhs the same was suspended with effect from the year 2014 with no further activity. Further, it has not conducted an impairment assessment for its tangible assets (viz., PPE & CWIP) during the year. In the absence of appropriate audit evidence for existence, reconciliation of PPE and CWIP and its impairment assessment thereof, we are unable to comment on the impact, if any, on the loss for the year and on the carrying value of the PPE and the CWIP as at the year end.

d Trade receivables & Contract Assets aggregating to Rs.71,876.60 lakhs (PY 73,183.97 lakhs), classified under various heads, include a sum of Rs.59,602.60 (PY Rs.62,243.76 lakhs) outstanding for a period exceeding three years against which the company carries a provision of Rs.10,703.60 lakhs (PY Rs. 10,404.39 lakhs). In the opinion of the management, the said dues other than those provided are fully recoverable. Further, the company has not provided the computation for the provision made towards the expected credit loss amounting to Rs.15,077.88 lakhs (PY Rs. 11,213.86 lakhs) as per the requirements of the Ind AS 109- "Financial Instruments". Considering the period of outstanding, the arbitration and legal proceedings which are pending for a substantial period of time, lack of appropriate audit evidence, non-availability of confirmation and reconciliation, we are unable to comment on the recoverability of these amounts and the adequacy of the provision, which will impact the loss for the year and carrying value of Trade Receivables as on 31st March 2023.

e As stated in Note No. 13, the company has not conducted the physical verification of the inventories during the year. Considering the age, the obsolescence of inventories, and its existence, we are unable to comment on its impact, if any, on the loss for the year and the carrying value of inventories as at the year end.

f As stated in Note No. 16, the Company has not made an impairment assessment of investments held in subsidiary (carrying value Rs. 820.10 lakhs) and on the loans and advances (carrying value Rs. 1,761.46 Lakhs) given to the wholly owned subsidiary. Considering the losses incurred by the subsidiary and the reduction in the revenues, we are unable to comment on the consequential impact, if any, on the loss for the year and their respective carrying values as at the year-end in respect of the above matters

g We have not received the statement of account for Rs. 1.12 lakhs (3 accounts) and confirmation of balance for Rs.468.52 lakhs (12 accounts) lying in the current account with banks, for Margin Money Deposits amounting to Rs. 110.50 lakhs as at the Balance sheet date. In the absence of sufficient appropriate audit evidence, we are unable to determine any possible impact thereof on the financial results and on the carrying value of cash and cash equivalents/ other bank balances as at the year end.

h As mentioned in Note No. 9 to the standalone financial results, in view of the continuing default to the terms of the restructuring package with the lenders, the status of borrowings, Optionally Convertible Debentures (OCD) and Non-convertible Debentures (NCD) have not been reclassified. Further, as stated in the said note,the Company has not computed and provided for additional and penal interest on defaults under borrowings as per the contractual terms of the underlying agreements up to the period ended March 31, 2023. As mentioned in Note No. 10, we have neither received bank statements nor have been able to obtain confirmations for restructured term loans including working capital loans from banks and financial institutions (Balance as per books as on March 31, 2023 amounting to Rs. 79,930.80 lakhs). In the absence of sufficient appropriate audit evidence, we are unable to determine the possible impact thereof on the loss for the year and on the value of borrowings as at the year-end

i The Company has not provided the appropriate audit evidence relating to the identification of micro and small enterprises and the dues thereon. Further the Company does not provide for interest on the dues to the micro and small enterprises as required under the Micro, Small and Medium Enterprises Development Act, 2006. Considering the non-identification of the micro and small vendors, we are unable to comment on the completeness of such disclosures made in the standalone financial results and its impact on the loss for the year.

j We refer to Note No.15 to the standalone financial results regarding delay in remittance and non-remittance of statutory dues (including GST/Service Tax/ VAT/ PF/TDS). The Company has not estimated and provided for the interest and penalty on defaults under the provisions of respective statutes. Therefore, we are unable to comment on the possible impact thereof on the loss for the year and on the carrying value of liabilities as at the year-end

k The details and basis for the estimate of the probable outflow of resources embodying economic benefits with respect to the ongoing contracts with customers were not made available for our audit. Further, as stated in Note No.17, the company has not made any provision for liquidated damages in respect of delayed projects as the management is confident that there would not be any adverse impact on completion of projects.Accordingly, the consequential impact, if any, in the financial results of the Company as at the year-end is not ascertainable

l We refer to Note 12, the Company had given corporate financial guarantees to the lenders on behalf of Noble Consolidated Glazings Limited and CCCL Infrastructure Limited, wholly owned subsidiaries. These subsidiaries have defaulted in repayment of their loan obligations and the lenders have invoked corporate guarantees during the year. Pursuant to the invocation of guarantee, the Company has received claims from such lenders amountto Rs.10,638.78 lakhs, which has not been recognized in the financial statements and to this extent the loss for the year, the liabilities is understated, and the other equity is overstated by the like amount as on March 31, 2023.

Management Response

a. Promoters have submitted a settlement plan under 12A of IBC along with an Investor and is being actively considered by the lenders.

b. We have been informed by the RP that certain information including the minutes of the meetings of the Committee of Creditors and the outcome of certain procedures carried out as a part of the CIRP are confidential in nature and could not be shared with anyone other than the Committee of Creditors and NCLT. Pending completion of the process, no adjustments could be given"

c. In view of security arrangement, the management doesnt expect any material differences on final reconciliation with books/records. Further, as the Company is currently under CIRP, the Company has also not made full assessment of impairment as required by Ind AS 36 on Impairment of Assets, if any, as at 31st March 2023 in the value of tangible assets and Capital work in progress. Further, management believe that no item of PPE has a net realizable value in the ordinary course of business which is less than the amount at which it is included in the PPE.

d. These receivables are periodically reviewed by the company and considering the commercial/contractual terms and ongoing discussions with the clients, the management is confident of recovering the entire dues and that no further provision against these dues needs to be considered.

According to the Management, claims under arbitration will be awarded fully in Companys favour on the basis of the contractual tenability, progress of arbitration and legal advice. The management estimates that the actual recoverability will be higher than the carrying value.

e. In view of strong internal controls, the management doesnt expect any material differences on final reconciliation with books/records. Further, management believe that no item of inventory has a net realizable value in the ordinary course of business which is less than the amount at which it is included in the inventories. Accordingly, no provision is required in respect of such inventories.

f. In the opinion of the management, resolution and revival of the Company is possible in foreseeable future and hence the management dont foresee any threat to the business continuity of such subsidiaries. Further, since the Company is currently in CIRP, no impairment assessment was carried on the Investments held in subsidiary and loans and advances given to subsidiary and accordingly no provision has been considered necessary by the management in respect of impairment in the value of investment / loans and advances beyond what has been recognised in the books.

g. Management believes that no material adjustments would be required in books of account upon receipt of these confirmations and that there will not be any material impact on loss for the year and also on state of affairs as at 31st March 2023.

h. Management believes that no material adjustments would be required in books of account upon receipt of these confirmations and that there will not be any material impact on loss for the year and also on state of affairs as at 31st March 2023. The Management feels that the liabilities are shown at its fair value and levy of additional interest or penal interest is not warranted due to ongoing CIRP.

i. Company is in the process of identifying the MSME Vendor except for the new vendor.

j. Delayed payment charges (including penalties amount unascertainable), will be accounted for as and when settled / paid

k. As per the past practice, the Company has assessed the financial impact on account of prolongation of the contracts tenure which were due to reasons beyond the Companys control and the Management is confident of completing such projects without incurring any additional cost beyond what has been estimated and that chance of incurring liquidated damages is remote. The company is in the process of estimation the future cost of the certain projects

l. The claims made by the lendors by invoking the Corporate Guarantee are admitted by the Resolution Professional as like other claims. However the promoters have submitted to settle the liabilities under 12A proposal.

INTERNAL AUDITOR

The Board/RPhas appointed M/s. Sri Hari Chandrasekhar and Associates, Chartered Accountants as the Internal Auditor of the Company pursuant to Section 138 of Companies Act, 2013 and Rule No. 13 of The Companies (Accounts of Companies) Rules, 2014 for the financial year 2022-23.

M/s. Sri Hari Chandrasekhar and Associates, Chartered Accountants are having expertise in finance and Accounts. The Internal Audit would ensure that strong internal control mechanism is put in place in the Company as per the recommendations and guidance of Liquidator / Audit Committee.

COST AUDITOR

The Board/RP of Directors had appointed M/s Swaminathan Sridharan & Co., (Firm Registration no: 103318) Cost accountants as the Cost Auditors of the Company to audit the cost accounting records of the Company for the financial year 2023-24.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. N. Balachandran, Practising Company Secretary, Chennai to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit Report is annexed herewith as "Annexure B"

MANAGEMENTS RESPONSE TO SECRETARIAL AUDITORS OBSERVATIONS

a. The Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations 2016 except there are few instances require compliance.

• There are no Non- Executive Independent Directors on the Board of the Company as on March 21, 2023. Therefore, there was a non-compliance with the Board Composition as on March 31, 2023.

b. The Secretarial Standards issued by The Institute of Company Secretaries of India, However, there are few instances which require compliance.

• The Company has strived to comply with the secretarial standards issued by ICSI however efforts are taken to streamline the same.

c) I further report that the following points requires attention and are beyond my scope

1) Erosion of Net worth

2) Uncertainty on Recovery of Trade Receivables

3) Winding up petition preferred by various corporate bodies against the Company.

4) Loans extended requires compliance under section 186(7) of Companies Act, 2013.

5) Board composition requiring compliance under Applicable Regulations of The Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015

6) There are overdue payments payable to MSME Enterprises under Micro, Small and Medium Enterprises Development Act 2006.

1) The net worth erosion has happened because of the continuous loss made by the Company. However the Company is hopeful of bringing the net worth positive in the coming years with the enhanced business opportunities.

2) The Company on day to day basis is closely following it up with the clients for the trade receivables. The Company is hopeful in recovering major dues in due course of time.

3) At present there is only one winding up petitions filed against the Company which is still in early stages and efforts are made to close it amicably.

4) The Company has not charged any interest for the loans extended to its subsidiary company as the subsidiary company is striving to revive and it becomes responsibility of the holding company to support the subsidiary companies to the maximum extent possible in its faster revival. Hence given the precarious situation any further interest burden to the Company will lead to greater deterioration of the Company.

5) This will be taken up with the stock exchange as the updation is required from the Exchange end.

6) These are operational overdues. The Company is striving to clear the MSME dues on priority.

e) I Further Report that the company is not regular in depositing the statutory dues / of filing periodical return as relating to and applicable, with the appropriate authorities during the year under audit.

• Due to the delay in collection from clients, the Company could not deposit its statutory dues on time. Inspite of the crippled situation the Company strives to comply with the statutory obligations on time. Efforts are being made to comply on time.

f) There has been non-compliance in repayment of amount outstanding on Optionally Convertible Debentures and interest thereupon

• The Company is negotiating with Banks for postponement of the said repayment

19. DIRECTORS:

There are no changes during the year under consideration.

19.1 INDUCTIONS/ CHANGE IN DESIGNATION

There are no changes in designation made during Financial Year 2022-23

19.2 DECLARATION BY INDEPENDENT DIRECTORS

There are no independent Directors in the Board.

19.3 RESIGNATIONS

There are no changes in the Directorship during FY 2022-23

19.4 RE-APPOINTMENTS

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum & Articles of Association of the Company, At the ensuing 26th Annual General Meeting, Shri. S. Sivaramakrishnan, Director of the Company is liable to retire by rotation and being eligible offer himself for re-appointment. The Liquidator recommends his reappointment.

Pursuant to honourable NCLT Order no. IA/627/CHE/2023 in IBA/483/2020 dt. 12th May 2023, Mr. Radhakrishnan Dharmarajan Registration No. IBBI/IPA-001/IPP00108/2017-18/10215 has been appointed as the Liquidator of the Company, to manage and take custody of all assets of the Company from the date of the Order.

As an abundant caution, though the Board of Directors has seized to exist consequent to the appointment of the liquidator, for all practical purposes, the further compliance aspects of the company are being carried out with the support of the then Board of Directors, for a smooth management and transition of the entire companys affairs. Accordingly, the Liquidator recommends the continuation of the appointment of Mr. Sivaramakrishnan, Director of the Company, who was holding the Managing Directorship of the company, for all practical purposes, as an ordinary business which is included in the notice calling the 26th AGM.

19.5 BOARD EVALUATION

Pursuant to the Regulation 17(6) (10) of SEBI (LODR) Regulations, 2015, the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated. The Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

However, pursuant to the appointment of Resolution Professional and subsequently liquidator, the evaluation and performance of Board may not be carried out as per the SEBI Regulations. However, the Liquidator / RP, as the case maybe, were seeking good support and coordination in maintaining the compliance aspect in relation to companies act and other applicable acts.

19.6 TRAINING OF INDEPENDENT DIRECTORS

During the Financial Year 2021-22 the Independent Directors have resigned from the Board. There are no Independent Directors as on 31st March, 2023. Hence, the said provision is not applicable.

19.7 REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The Executive Directors have deferred their salaries till revival of the Company and all other remunerations paid to the Key Managerial Personnel and senior management personnel are as per the remuneration policy of the Company.

19.8 DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors, make the following statement in terms of Section 134 (3) (c) of the Companies Act, 2013:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

A statement containing the particulars relating to conservation of energy, research and development and technology absorption as required under Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 (3) (A), (3) (B) and 3 (A) (C) of The Companies (Accounts) Rules, 2014 is annexed to this report as "Annexure C"

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013

Details of Loan, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to financial statements.

22. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 of the Companies Act 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of the employees of the company, is annexed to this report as "Annexure E"

23. DEPOSITS

Your Company has not accepted any deposits from the public during the year under review.

24. MEETINGS

During the year 6 Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

25. COMMITTEES

The provisions as specified in Regulations 18 (Audit Committee), Regulation 19 (Nomination and Remuneration Committee), Regulation 20 (Stakeholders Relationship Committee) and Regulation 21 (Risk Management Committee) under SEBI (LODR) Regulations, 2015 got suspended as the Companys business affairs and operations are vested with RP/ Liquidator, pursuant to Section 17 and 34 of IBC respectively.

All these Committees got dissolved on 20th April, 2021 when NCLT Passed order for initiation of CIRP as the power of the board was ceased on appointment of liquidator. However, the Liquidator is taking adequate steps and care while complying with various applicable regulations of SEBI in the ordinary course of business.

In this regard, the Liquidator / RP are getting enough support and coordination from the BOD / Committees as the case maybe.

26. CREDITORS MEETING

Creditors Meetings (CoC) were conducted during the course of the financial year then and there and matters relevant to IBC Proceedings along with the revival plans were duly placed before the meetings, among all other items that required confirmation from Creditors.

27. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a vigil mechanism/whistle blower Policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

28. PARTICULARS OF CONTRACTS OR ARRAGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013:

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The Company is in the process of developing a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. None of the Directors has any pecuniary relationships or transactions vis-?-vis the Company. Particulars of Contracts or arrangement with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure "D" to the Liquidators Report.

29. ENHANCING SHAREHOLDER VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly your companys operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your company is also committed to creating value for its other stakeholders by ensuring its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

30. ANNUAL RETURN

In accordance with in terms of the requirements of Section 134(3) (a) of the Act, 2013 read with the Companies (Accounts) Rules, 2014 the annual return in the prescribed format is available at www.ccclindia.com.

31. COMPLIANCE OF SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013.

32. GREEN INITIATIVES

During fiscal 2014-15, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. This year, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.ccclindia.com.

Electronic copies of the Annual Report 2022-23 and Notice of the 26th Annual General Meeting are sent to all the members whose email addresses are registered with the Company/Depository Participant(s).

33. ACKNOWLEDGEMENT

The Liquidator of the Company wishes to express their deep sense of appreciation and offer their sincere thanks to all the Shareholders of the Company for their unstinted support to the Company.

The Liquidator also wishes to express their sincere thanks to all the esteemed Customers for their support to the Companys business.

The Liquidator would also like to place on record their deep sense of gratitude to the various Central and State Government Departments, Banks, Organizations and Agencies for the continued help and co-operation extended by them.

In the end, the Board would like to place on record their deep sense of appreciation to all the executives, officers, employees, staff members, and workers at the various sites.

	For Consolidated Construction Consortium Limited
	(Under Corporate Insolvency Resolution Process)
	Mr Radhakrishnan Dharmarajan
Place: Chennai	Liquidator
Date: 22nd August, 2023	IBBI/IPA-001/IPP00108/2017-18/10215

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